U.S. Markets closed

Is Gran Colombia Gold Corp’s (TSE:GCM) CEO Pay Fair?

Lombardo Paredes Arenas has been the CEO of Gran Colombia Gold Corp (TSE:GCM) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Gran Colombia Gold

How Does Lombardo Paredes Arenas’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Gran Colombia Gold Corp has a market cap of CA$115m, and is paying total annual CEO compensation of US$419k. That’s a modest increase of 5.2% on the prior year year. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$117k.

It would therefore appear that Gran Colombia Gold Corp pays Lombardo Paredes Arenas more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Gran Colombia Gold, below.

TSX:GCM CEO Compensation November 14th 18

Is Gran Colombia Gold Corp Growing?

Gran Colombia Gold Corp has reduced its earnings per share by an average of 65% a year, over the last three years. In the last year, its revenue is up 22%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Gran Colombia Gold Corp Been A Good Investment?

With a three year total loss of 16%, Gran Colombia Gold Corp would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared total CEO remuneration at Gran Colombia Gold Corp with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Gran Colombia Gold Corp (free visualization of insider trades).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.